PR COMMISSIONER OF INCOME TAX 2 CHD vs. RAMESH KUMAR DUDANI

ITA/93/2016HC Punjab & HaryanaPHHC01110690201611 July 2018Author: MR. JUSTICE AJAY KUMAR MITTAL,MR. JUSTICE AVNEESH JHINGAN2 pages
AI SummaryRemanded

What were the facts?

The Revenue Authority (Pr.Commissioner of Income Tax-II, Chandigarh) filed an appeal under Section 260-A of the Income Tax Act, 1961, against an order dated 26.10.2015 passed by the Income Tax Appellate Tribunal (ITAT), Chandigarh Bench. The ITAT had upheld the order of the CIT(A) which quashed a penalty of Rs.25,24,868/- imposed under Section 271(1)(c) of the Act for the assessment year 2009-10. The penalty arose from reallocation of expenses between the assessee's Theog and Mohali units under Section 80IA(10) of the Act. The assessee contended that additions were based on estimates, making penalty non-leviable. The Assessing Officer disagreed and imposed the penalty, which was subsequently quashed by the CIT(A).

What did the High Court hold?

The High Court noted that the quantum appeals against the assessment orders had been remanded back to the Assessing Officer (AO) for a fresh decision by a separate order of even date. Consequently, the impugned orders in the present appeal were also set aside. The issue of penalty was remitted back to the AO to pass a fresh order after adjudicating the quantum proceedings in accordance with law. The High Court did not decide the merits of the penalty deletion. The principle that can be cited is that penalty proceedings are consequential to the assessment, and if the assessment is remanded, the penalty issue may also be remanded.

What were the issues?

1. Whether on the facts and in the circumstances of the case and in law, the Hon'ble ITAT was right in deleting the penalty of Rs.25,24,868/- levied by the AO in respect of addition of Rs.58,91,946/- made on account of re-allocation of booking of expenses of exempt unit which the assessee has claimed against non-exempt unit resulting in misuse of provisions of Section 80-IC of the Act read with section 80IA(10)? Assessee's contentions: Not recorded in the judgment. Revenue's contentions: The ITAT was wrong in deleting the penalty. The addition was made due to the assessee's misuse of Section 80-IC read with Section 80IA(10) by reallocating expenses of an exempt unit to a non-exempt unit.

Which sections of the Income-tax Act were involved?

Section 260-A,Section 271(1)(c),Section 80IA(10),Section 80-IC

AI-generated summary — verify with the full judgment below

-1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Date of Decision: 11.07.2018 The Pr.Commissioner of Income Tax-II, Chandigarh .......Appellant Versus Sh. Ramesh Kumar Dudani ......Respondent CORAM: HON'BLE MR. JUSTICE AJAY KUMAR MITTAL. HON'BLE MR. JUSTICE AVNEESH JHINGAN.

Present: Mrs. Urvashi Dhugga, Senior Standing counsel for the appellant-revenue.

Mrs. Radhika Suri, Senior Advocate with Mr. Manpreet Singh Kanda, Advocate for the respondent. AVNEESH JHINGAN, J.

The present appeal has been preferred by the Revenue Authority under Section 260-A of the Income Tax Act, 1961 ( for short 'the Act') against the order dated 26.10.2015 (Annexure A6) passed by the Income Tax Appellate Tribunal, Chandigarh Bench, Chandigarh (hereinafter refereed to as the Tribunal). The Tribunal upheld the order of CIT(A) quashing penalty of Rs.25,24,868/- imposed under Section 271(1) (c) of the Act relating to the assessment year 2009-10.

The brief facts of the case are that in the assessment proceedings for the assessme

The order continues below.

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